Wall Street dips on Japan aftershock; retailers rise

Wall Street slipped on Thursday after a major aftershock in Japan reignited fears about its nuclear power crisis, but greater faith in the U.S. economy's steady path held losses in check.

A rise in retail stocks after better-than-expected March chain-store sales limited broader market declines as the data added to evidence of a sustained economic recovery.

Investors sought protection against further market declines following the magnitude 7.4 aftershock in Japan, but a move to safer assets did not materialize.

It made people think that this is an ongoing crisis that could further hurt stocks, but one thing we didn't see is the flight to safety, said John Canally, economist at LPL Financial in Boston, Massachusetts.

Chris McKhann, analyst at stock and options website optionMonster.com in Chicago, said the VIX had little reaction to the earthquake news, further supporting the fact that nothing seems to shake this market.

Stocks had been mostly flat in early trading. The S&P 500 encountered strong technical resistance that stymied gains after a larger-than-expected drop in weekly initial U.S. jobless claims and data on the surprisingly strong March retail sales.

The Dow Jones industrial average was down 17.26 points, or 0.14 percent, at 12,409.49. The Standard & Poor's 500 Index was down 2.03 points, or 0.15 percent, at 1,333.51. The Nasdaq Composite Index was down 3.68 points, or 0.13 percent, at 2,796.14.

Volume was 7.06 billion shares on the New York Stock Exchange, NYSE Amex and Nasdaq, compared with last year's estimated daily average of 8.47 billion.

Bed Bath and Beyond Inc surged 10.5 percent to $54.55 a day after it forecast full-year earnings growth that would beat Wall Street expectations.